Trade Minister Dan Tehan has expressed disappointment over the downward spiral in diplomatic relations with China.
Beijing has indefinitely suspended all contact under the China-Australia Strategic Economic Dialogue.
It is the latest move in a long-running feud and will make already strained diplomatic relations even harder to repair.
"We want to have a dialogue with China, we want to be able to work through our differences," Mr Tehan told Seven on Friday.
"We have a very important economic relationship, which has helped both countries. It has lifted millions out of poverty in China, it helps our standard of living here in Australia.
"Our hope is we will be able to have a dialogue over time and work through these differences."
Foreign Minister Marise Payne said the economic dialogue had been a valuable tool.
"We have been very clear that we were willing and able to participate in an ongoing strategic and economic dialogue - that is ultimately a decision for China," she told reporters in London.
"Australia is very ready to engage in dialogue with our counterparts at any level."
Beijing's move freezes discussions between key Chinese and Australian officials below ministerial level.
But its decision is largely symbolic, given Beijing was already refusing high-level meetings and discussions under the dialogue had not taken place in several years.
China has launched a series of strikes against Australian commodities over the past year in response to an assortment of grievances.
But Beijing continues to buy vast quantities of Australian iron ore at record prices, minimising the economic impact.
The minister said two-way trade helped both countries.
"If decisions are taken which impact on our commercial relationship, ultimately in the end it harms both nations," Mr Tehan said.
"That's why we want to be able to sit down and have a dialogue with China and work through these issues."
The decision to cut dialogue comes after the Morrison government cancelled Victoria's Belt and Road agreement with China.
Chinese foreign ministry spokesman Wang Wenbin described cutting such ties with Beijing as insane.
"We urge the Australian side to cast aside the Cold-War mentality and ideological bias, view China's development and China-Australia cooperation in a truly objective light, return to the rational track without further delay and correct its mistakes," he said.
"It should stop the insane suppression targeting China-Australia cooperation, stop politicising and stigmatising normal exchange, and stop going further down the wrong path."
Mr Tehan insists ripping up the Belt and Road deal was a "country agnostic" decision.
"What the government did was make sure it is the federal government that's in control and sets the policy when it comes to our foreign relations," he said.
"That decision wasn't about China, it also impacted on other countries as well, and it was about centralising control of our foreign policy."
Australian Associated Press
